In the four year runup to his nomination as US Attorney for Southern District of New York (SDNY), Jay Clayton was a lead attorney at Sullivan & Cromwell (S&C) where he represented Standard Chartered Bank (SCB) which had a major Iran sanctions evasion case before the SDNY. During Clayton’s vetting and nomination process in early 2025 he was still on the Executive Management Board of Sullivan & Cromwell, lead counsel for SCB. Clayton had a direct decision-making role in defending SCB in the SDNY case. At the time of his nomination, SCB was found to be in breach of the $1.1 billion Deferred Prosecution Agreement for financing Iranian oil sales and weapons purchases. US law prevents Federal officials from conflicts of interest or the appearance of improprieties.
Based on the facts that have emerged since his unsuccessful nomination a year ago, Clayton would have even more scrutiny of his role at S&C on the SCB sanctions evasion case if he should try again to convince the US Senate.
The next US Attorney General must be free of conflicts. He or she must have the integrity to fight rampant corruption. Jay Clayton fails on both counts.
One of the largest clients of S&C is SCB, a known Iranian sanctions evasion repeat offender still under a Deferred Prosecution Agreement for billions of illegal payments made since 2012.
Oil sales settle in US dollars and require a US branch bank to perform the currency clearing. Spreads on the illicit SCB sanctions evasion payments from among the 30,000 spreadsheets turned over to the NYAG and SDNY in early 2024 showed spreads of 5.00% to 9.00% on its illicit dollar clearing. Had the large payment flows been legitimate currency trading, spreads would have been only 0.10% to 0.20%. Knowing your customer and how to evade sanctions is very lucrative and largely overlooked by today’s woke Federal Reserve and the FedWire clearing backbone SWIFT. In making the 2019 settlement with SCB, SDNY only looked at direct payments from one SCB office, ignoring those transactions with Chinese, African, and Venezuelan counterparties. In the months after October 7, 2023 and in an election year the NYAG and SDNY overlooked over $100 billion of derivatives and large currency trades even though at least $9.6 billion were found to have been to sanctioned Iranian names.
SCB had two large sanctions evasion settlements with the US and NY State in 2012 and 2019 with total fines paid by SCB of $1.8B. However, in early 2024 SCB was found to have been in breach of those settlement agreements by cloaking the derivative and currency trades. SCB insiders formed Brutus Trading, LLC and claimed SCB trafficked another $9.6B of evasion payments to known Specially Designated Terrorists Groups that fund Iranian terror.These illegal payments made from SCB’s New York City office were ignored by NY AG Letitia James who renewed the banks annual charter. When Jay Clayton represented SCB on the sanctions evasion, Brutus Trading met in early 2024 with NYAG and SDNY to report the cloaked payments.
With President Trump ramping up Iran sanctions in early 2025, SCB embraced moves to settle trades in more easily cloaked private crypto, a medium and policy Clayton lobbied for adoption to the Trump Administration.
In summer of 2025, the UK High Court ruled SCB had misled investors on the cloaked currency trades. Letitia James, indicted for mortgage fraud, was also accused by Brutus Trading of ignoring the breach of the Deferred Prosecution Agreement.
On Aug 11, 2025, Brutus and counsel met with Clayton at SDNY where Clayton and team were adamant the Obama SDNY team was unassailable while Clayton’s deputy argued to kill the investigation. Clayton failed to disclose that he had been SCB’s lead attorney and was intent on getting briefed on his first day at SDNY on what SDNY had in process on the SCB case.
Stefanik requests to cure the SDNY conflict by appointment of Alina Habba as Special Attorney to investigate James and SCB.
On August 15, 2025, Congresswoman Elise Stefanik issued a public letter to Attorney General Pam Bondi. In it, she requested a DOJ investigation into Standard Chartered Bank’s alleged ongoing sanctions evasion (including $9.6 billion in illicit payments tied to terrorists and Iranian oil purchases hidden from regulators). She also criticized New York Attorney General Letitia James for being briefed on the issues but taking no action while approving the bank’s licensure.
August 15 and 16 2025 Clayton actively lobbied Alina Habba not to take the case into NJ where SCB has a server that tracked the billions of illicit payments to sanctioned Iranian names and entities. Clayton insisted he retain the case despite having been actively involved on the other side of the table at S&C.
Timeline of the Corruption:
- 2001, Clayton becomes partner at Sullivan & Cromwell
- From 2001 to 2017, Clayton elevated to co-head of the Sullivan & Cromwell Corporate Practices Group and its General Practice Group covering banking clients including Standard Chartered Bank and Goldman Sachs.
- 2012, Standard Chartered Bank, with S&C as lead counsel, settles sanctions evasion case for $667 million and enters into a Deferred Prosecution Agreement promising to cease all future illicit payments and to report any to the DOJ.
- In 2017 Clayton was nominated and confirmed as Commissioner of the Securities and Exchange Commission.
- 2019, Standard Chartered Bank, again with S&C as lead counsel, enters into another $1.1 billion settlement agreement for new sanctions evasion payments and a new DPA
- 2021, Clayton ends role at SEC and returns to S&C where he again is in a decision-making role for his client Standard Chartered Bank
- 2024, Brutus Trading files suit in SDNY that Standard Chartered Bank made another $9.6 billion of illicit Iran sanctions evasion payments that were not part of the prior settlements.
- February & March 2024, Brutus Trading meets with SDNY and with NY AG twice to present all the illicit trade evidence. NYAG Letitia James along with the then Obama USA SDNY Damian Williams refuse to investigate the $9.6 billion of illicit payments made by SCB. S&C still lead counsel to SCB.
- 2024, UK High Court rules in favor of SCB shareholders for the bank’s failure to report the $9.6 billion of Iran sanctions evasion payments. SEC sits out.
- April 16, 2025, Clayton appointed US Attorney for SDNY and in his first week, reviewed the SDNY side of the SCB case.
- August 11, 2025, Brutus Trading meets with Clayton and team at SDNY pushing to investigate the $9.6 billion of illicit payments that SDNY failed to include in the prior settlements with SCB.
- August 15, 2025, Elise Stefanik posts her letter to USAG Pam Bondi demanding investigation of the SCB Iran sanctions evasion and the role of Letitia James in renewing SCB’s State banking license asking it to be moved out of SDNY to New Jersey where SCB has its main currency trade server.
- August 16, Clayton successfully lobbies to keep and kill the case calling Alina Habba to back off of her interest in investigating the bank and Letitia James.
- August 18, 2025, with his nomination blocked by the US Senate, Clayton’s interim term set to end, the Board of Judges in the Southern District of New York voted to appoint Clayton as interim US Attorney where he remains today.
- August 19, 2025, Clayton’s SDNY files in the Brutus case that it will not pursue further investigation. SCB publicly welcomed the SDNY filing to never investigate.
Since August 2025, SDNY has done no investigation of SCB or the NYAG
